Verification of identity – does it always need to be in person?
Verification of Identity (VOI) is an important safeguard in property transactions, providing certainty about the identity of parties and aiming to prevent fraudulent dealings. Traditionally, this process has taken place via face-to-face meetings; however, given technological advancements and requirements resulting from the COVID-19 pandemic, verifying a party’s identity virtually is becoming more common.
With the recent introduction of Australia’s e-conveyancing system, VOI has never been more important for protecting parties in property transactions. However, the move towards digitising VOI has added a new layer of both complexity and risk, especially with the onus resting with legal practitioners and conveyancers to take reasonable steps to confirm a party’s identity. This article explores the practitioner’s responsibility in relying on VOI in a digital context in this ‘new age’.
BEST PRACTICE – THE VOI STANDARD
Although, VOI rules vary across jurisdictions (and do not currently exist in the Northern Territory or Australian Capital Territory), generally as a minimum, these rules require that practitioners apply the VOI standard to verify the identity of parties to the transaction.
Applying the VOI standard means that the verifier must conduct VOI by way of a face-to-face in-person interview, where the person being identified must produce original documents containing photographs .e.g. drivers licence and passport, unless an interview between the two has been conducted in the previous two years.
In the interview, the verifier must be satisfied that the documents produced bear a reasonable likeness to the person sitting across from them. Where a verifier knows, or ought reasonably to know, that a document is not genuine, or a photograph does not bear a likeness to the person being identified, the verifier must take additional steps to confirm that person’s identity.
WHAT IF THE VOI STANDARD CAN’T BE REASONABLY ACHIEVED?
The participation rules contemplate a further option to applying the VOI standard providing that the verifier can verify the identity of a person in some other way ‘that constitutes the taking of reasonable steps’. Although the VOI standard is regarded as best practice, it is not considered mandatory and this has indirectly opened the door to VOI’s digitisation as an alternative to face-to-face in person interviews.
What constitutes “reasonable steps” is not defined and may be influenced by various factors, not least a pandemic, and is a question of fact which, if challenged in court, will be decided on an objective basis (i.e. what steps would a prudent practitioner have taken in the circumstances?). Importantly, practitioners should retain evidence supporting the reasons why the VOI standard was not pursued to demonstrate they have taken reasonable steps. The evidence must detail what other ‘reasonable steps’ were taken; for example, detailed file notes of meetings, copy of video call(s), text messages, photos of identification documents (including a certification), emails and other related correspondence.
As it is a matter for the practitioner to determine what constitutes “reasonable steps” in the circumstances, reasonable steps may allow for virtual identification conducted by way of a video call. During the video call, the person whose identity is being verified should not only show the practitioner or agent their supporting documentation but also appear fully, such that the practitioner or agent can be satisfied of their likeness to the documents that are produced. Naturally, this presents verifiers with some risks, particularly that people may defraud the identification process by presenting false or fraudulent supporting documentation over a video link. Additionally, a video link is not the human eye, and the quality of any identification made virtually could be called into question. Accordingly, this form of VOI ideally may only want to be relied upon where the person being identified is known to the verifier. Despite these apprehensions, the Australian Registrars’ National Electronic Conveyancing Council (ARNECC) has recognised that practitioners and agents may wish to use video technology as part of the VOI process.
OUTSOURCING THE VOI PROCESS – IDENTITY AGENTS
As an alternative to conducting the VOI themselves, practitioners may also outsource the VOI process to a third party, however in doing this the practitioner should satisfy themselves that the third party is an authorised identity agent.
ARNECC has provided guidance on who is an authorised identity agent noting that an identity agent who is authorised to perform VOI can include a legal practitioner, conveyancer or third party agent, provided that such persons or entity:
- holds the required minimum level of insurance;
- is engaged by a person or entity reasonably believing them to be reputable and competent; and
- is authorised by the person or entity to conduct VOI.
THE WAY FORWARD
In the current circumstances, legal practitioners and conveyancers are easily justified in using video technology to conduct VOI. Despite this, its users should proceed with an awareness and an abundance of caution of the risk of its manipulation or forgery, and consider going beyond the processes and queries conducted in a usual, face-to-face in person VOI interview.
Particularly, users should strive for the best quality audio-visual services possible and be sure to retain a copy of information relating to the video call, all documents relied on, a copy of all questions asked and all responses, and all other evidence relating to the VOI process. Importantly, if any doubts arise as to a person’s identity, or the documents or photographs that are being relied on, the verifier must make further enquiries. For further information on any of the issues raised in this alert, please contact one of our Property team members.
Special thanks to Felicia Pserras, Lawyer for her assistance in putting this article together.
 In NSW and Queensland, the VOI standard is the standard set out in Schedule 8 of the NSW Participation Rules and Queensland Participation Rules for electronic conveyancing determined under the Electronic Conveyancing National Law, which is an appendix to the Participation Rules.
 This is the position In NSW, refer to rule 4.1.4 of the Conveyancing Rules made under section 12E of the Real Property Act 1900 (NSW).
 See rule 21 of the Participation Rules for the position in NSW.
 See rule 5.4.2 for NSW and Rule 6.5.2 for QLD.
 The insurance requirements are outlined in the Electronic Conveyancing (Adoption of National Law) Act 2012 (NSW) (Participation Rules).
This publication covers legal and technical issues in a general way. It is not designed to express opinions on specific cases. It is intended for information purposes only and should not be regarded as legal advice. Further advice should be obtained before taking action on any issue dealt with in this publication.